Posted on June 6, 2008 @ 11:48 pm - Written by BawldGuy
Warning: Pictures woven into this post are absolutely irrelevant to the text. Sometimes that’s just the way I roll.
The news on real estate varies from region to region, generating more opportunities for anyone with a keyboard to say ‘all real estate is local’ as if it was their original thought. It’s not secret Florida, Arizona, Nevada and California have been the hardest hit with this long lived market correction. The smart investors are, as quickly and efficiently as they can, taking their equity out of those states and into the regions showing solid strength — both currently and in the future. Arizona is the exception, long term to that statement, as they will, in my opinion, live up to their name when all of this has finished flushing through the system.
We’re currently taking clients to a handful of areas in Texas, while about to make judgments on three projects in Kansas City. Recently I had a pretty interesting conversation with an upcoming pro in a South Carolina city (Sorry, but stealth is required here.) which at least got me wanting another conversation. Haven’t heard from him since, but I’m sure he’s takin’ care of business. Also, have been intrigued by a small pocket in the Northwest, a region I’ve proactively ignored for years. Their numbers just haven’t measured up.
Posted on May 18, 2008 @ 12:42 am - Written by BawldGuy
I’ll be one of the panel members of Unchained, which is a conference for real estate pros, related venders, and marketing types, both social and otherwise. Sound a tad ambiguous? It’s the best I can do. It’s all about how to be excellent if that helps any. It’s put on by Greg Swann and Brian Brady over at BloodhoundBlog. Greg’s the proud owner, while Brian is a contributing writer, as am I.
One of the subjects sure to come up is the economy and real estate specifically. I have some thoughts to offer. Take a deep breath or two and your shock will dissipate.
I mentioned earlier this year how historically, in bad real estate times, one of the signs a recovery might be on the way, is the gathering of what I call the Godzillas. I define Godzillas as investors, people or entities, bringing a minimum of $50 Million to the table. I spoke of one such group having raised near $1 Billion. This is now happening in several sectors of the real estate market — both by type and geography. They’re surveying the lender landscape, and like much of what they see.
What has given huge encouragement to me personally is what’s emerging from lenders — it appears, one by one, they’re beginning to pull their heads out…(you finish this one). What am I talking about?
Many sophisticated real estate investors have been quietly buying bad loans from lenders at impressive discounts. Ironically what makes this encouraging isn’t that they’re being purchased. No — what’s so cool about this is that the lenders are finally facing the music everyone else has been playing. They’re bitin’ the bullet and clearing the shelves of all their rotten apples. This is what’s often referred to as cleansing the market — indeed. And that’s exactly what this will do.
I’ve been working on a post regarding this topic for several days, when up pops Sean, a sporadic commenter here. He’s seen this trend surfacing too, wanting to know my thoughts. Good on you Sean.
Bottom line? This is an exceptionally good thing.
When the banks begin selling their ‘defective merchandise’ at the swapmeets, the cleanse is officially in overdrive.
Posted on May 14, 2008 @ 9:25 pm - Written by BawldGuy
Sometimes it’s human nature, I know I’ve done it more than once. Spin what we see, hear, and experience first hand to align with what we apparently need to believe. I’ll be the first to admit I Got Outa Dodge a year late. Why? ‘Cuz, ah, well, oh forget it. I was irrational about the trend I was watching in real time. And I’m a pro! Yeah, I got my clients into better markets in time for the most part — the ones who listened. But I should’ve had them out a full 12 months sooner.
Californians so often behave as if the 11th commandment, listed on the third tablet Moses lost on the way down the mountain, said, California Real Estate Shalt Forever Be Blessed…Not.
Take the California real estate market bordered geographically by Santa Barbara on the north, and the Mexican border on the south. Throwing out the low and the high prices for a selected property type, say a duplex for instance, and what do we have? Give or take a half million dollar property. Allow a fudge factor of $50,000 or so. Now, let’s assume an average appreciation rate of only 3.5% — historically way below what SoCal has become accustomed to. In 20 years that duplex is now valued at just under a million bucks.
Everyone who believes folks’ll be standing in line for ancient duplexes at that price, please stand on yer head in the corner and stack bb’s with yer nose.
And the Kansas City Royals, in that same 20 year period will become the most impressive baseball dynasty since the Yankees of the ’20’s and ’30’s. See? Read the rest of this entry »
Posted on May 5, 2008 @ 11:39 pm - Written by BawldGuy
Living in Paradise, uh, San Diego, brings with it certain obligations. Today brought one of them — Cinco de Mayo. You will have lunch or dinner, sometimes both, at a local Mexican eatery. It’s the law. Fortunately, you can’t swing a dead cat in San Diego without hitting a Mexican restaurant, and most of them are decent to pretty dang good. The Boss called saying we were having Mexican food tonight, so guess where I just came from?
Eat yer heart out, Chris.
She asked me, as is her special talent, what was the most obvious change we may be seeing in the future of real estate investing. Come on Honey, I’m havin’ chips ‘n dip with a forklift sized plate of enchiladas suiza on the way. (Sad pathetic face.) Pan to The Boss throwing her rolling eyes, ‘what’s yer point?’ look. I immediately went into my response.
Upon hearing me out, she suggested a title including the phrase, ‘an inconvenient truth’ which I immediately liked.
Posted on May 2, 2008 @ 3:10 pm - Written by BawldGuy
It’s not even 2 o’clock yet and the cell is already smokin’, ready for a charge. Geez. It’s Friday, and I’ve already worked nine days this week. (whining infant in background) I’m draggin’ just a bit.
Here’s a thought I woke up with though, concerning the latest rise in commodity prices. Think back to the years when NASDAQ was on its near vertical rise — give or take ‘99-’01. It hit the wall like a crash test dummy. It’s my opinion we’re about to see the same thing with commodities. Much of the price increases are a direct result of speculators dominating the exchanges. There are some very experienced and knowledgeable folks who’re saying exactly that and more. They’re also calling for Bernanke to intervene with the same strong leadership displayed with the Bear Stearns problem.
The commodity market wasn’t designed to be taken over and almost completely controlled by speculators whose only agenda is to control the market to their own ends. Bernanke knows what’s going on. I wonder what he’s been thinking?
Regardless, look for the prices of commodities to come down big time. When? Sorry, but the ol’ crystal ball remains in the shop. My take is it won’t be that long though. We may be seeing cracks already.
Meanwhile, I’m officially calling an end to the work day. (Fat chance of that gaining much traction.) Anywho, crank up the volume as high as it goes, and hit the floor dancin’.
